Exam 5: Elasticity and Its Application

You are in charge of the local city-owned aquatic center. You need to increase the revenue generated by the aquatic center to meet expenses. The mayor advises you to increase the price of a day pass. The city manager recommends reducing the price of a day pass. You realize that

Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a change in price, the

The production of methamphetamine meth) is a social problem in the Midwest. Iowa is considering two potential programs: Operation Methbust would increase the number of sheriffs' deputies to search out and destroy methamphetamine labs. Operation Say No to Meth would increase the training required of public school teachers so that they could better educate students about the health risks of using meth. Assuming that each program were successful, which of the following statements is correct?

If the demand for bananas is elastic, then an increase in the price of bananas will

Figure 5-20 -Refer to Figure 5-20. Which supply curve is most likely relevant over a very long period of time?

The smaller the price elasticity of demand, the

Which of the following should be held constant when calculating an income elasticity of demand?

Figure 5-11 A: The Elasticity of Demand -Refer to Figure 5-11. A decrease in price from $20 to $10 leads to a

A key determinant of the price elasticity of supply is the

Figure 5-17 -Refer to Figure 5-17. Using the midpoint method, what is the price elasticity of supply between point B and point C?

If two goods are complements, their cross-price elasticity will be

If the price of gasoline rises, when is the price elasticity of demand likely to be the highest?

In the short run, as compared to the long run, both the price elasticity of demand and the price elasticity of supply tend to be more

Figure 5-14 -Refer to Figure 5-14. Using the midpoint method, what is the price elasticity of supply between $100 and $220?

If the demand for textbooks is inelastic, then an increase in the price of textbooks will

If a 10% decrease in price for a good results in a 20% increase in quantity demanded, the price elasticity of demand is

Figure 5-4 -Refer to Figure 5-4. If the price decreases in the region of the demand curve between points B and C, we can expect total revenue to

The federal government is concerned about obesity in the United States. Congress is considering two plans. One will ban the production and sale of "junk food." The other will increase nutrition­education programs and include substantial advertising campaigns to encourage healthy eating habits. The junk-food ban program

Why was OPEC unable to maintain high oil prices in the long run?

For a particular good, a 3 percent increase in price causes a 10 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?